How All 50 States Are Taxing Retirees In 2021

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13.Idaho: tax-friendly

Idaho is not such a tax-friendly state at first sight. The state taxes all income, except Social Security and Railroad Retirement benefits. In spite of this, sales taxes aren’t so bad in Idaho, and because groceries are taxable, the state gives you a tax credit of $100/person to offset these- which raises it to $120 if you’re over 65.

  • The State Income Tax Range is 1% (on taxable income up to $2,000 for married couples that filed jointly and up to $1,000 for individual filers)- 6.5%(on taxable income of $10,000 or more for married joint filers and $5,000 or more for single filers);
  • The Average Combined State and Local Sales Tax Rate is 6.02%;
  • The Median Property Tax Rate is $633/$100,000 of assessed home value;
  • No Estate Tax or Inheritance Tax.

14.Illinois: not so tax-friendly

Unfortunately, property taxes can be very harsh for retirees in Illinois. The statewide median property tax rate in Illinois goes through the roof.

  • The State Income Tax Range is 4.95%;
  • The Average Combined State and Local Sales Tax Rate is 8.83%;
  • The Median Property Tax Rate is $2,165/$100,000 of assessed home value;
  • There is Estate Tax, but no Inheritance Tax.

15.Indiana: definitely not tax-friendly

While the Indiana state exempts Social Security benefits, IRAs, 401(k) plans and private pensions are fully taxable.

  • The State Income Tax Range is 3.23%;
  • The Average Combined State and Local Sales Tax Rate is 7%;
  • The Median Property Tax Rate is $810/$100,000 of assessed home value;
  • No Estate tax or Inheritance tax.

16.Iowa: not so tax-friendly

Property taxes in Iowa are very high, that’s why it has such a poor rating in matters of taxes. The median property tax rate in Iowa is the 11th-highest in the nation.

  • The State Income Tax Range is 0.33%(on up to $1,676 of taxable income)- 8.53%(on taxable income over $75,420);
  • The Average Combined State and Local Sales Tax Rate is 6.94%;
  • The Median Property Tax Rate is $1.529/$100,000 of assessed home value;
  • There’s no Estate Tax, but there is Inheritance Tax.
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